Auditing: Insurance and Royal Commission
MIT765801
AUDITING
Individual Assignment
HIH Insurance Report
Student Name: Jinyun Wang
Student ID: MIT122634
Lecturer Name: Susan Currie
Tutor Name: Susan Currie
Due Date: 29 / 1 / 2014
Submitted date: 7/ 2/ 2014 by email
Executive Summary
The auditing profession plays a significant role in industrialized economies for many years. In the insurance industry, the manner of auditing profession is regulated. The collapse of Health International Holdings (HIH) was recorded as the biggest corporate collapse in the history of Australia. Also an investigation of Royal Commission was warranted by the HIH collapse. Two questions considered in the failures of HIH Insurance: Did the auditors implement their responsibilities and roles? Did the auditors fulfil their auditing work ethically? This report provides an analysis of auditing issues arising from the collapse of HIH Insurance. Among factors that have gave rise to the corporate failure of HIH Insurance, that of the ethics of auditing profession, roles of auditors and effectiveness of audit committee have regarded as particular significance.
Contents
1. Introduction
HIH Insurance was established when MW Payne Liability Agencies Pty Ltd was incorporated by Michael Payne and Ray Williams joining together to do business of insurance underwriter in Australia in 1968. Their operations were throughout the world, accompanied with businesses working in numerous countries such as the United Kingdom, New Zealand, Hong Kong, and the United States (Peursem, Zhou, Flood & Buttimore, 2007). There are many varieties of insurances in the markets of UK, the USA and Australia, involving compulsory insurance (for example, workers’ compensation and third party motor vehicle insurance) and non-compulsory insurance (for instance, home contents and travel insurance) (Kehl, 2001).
More than 250 subsidiary companies comprised of HIH Insurance
AUDITING
Individual Assignment
HIH Insurance Report
Student Name: Jinyun Wang
Student ID: MIT122634
Lecturer Name: Susan Currie
Tutor Name: Susan Currie
Due Date: 29 / 1 / 2014
Submitted date: 7/ 2/ 2014 by email
Executive Summary
The auditing profession plays a significant role in industrialized economies for many years. In the insurance industry, the manner of auditing profession is regulated. The collapse of Health International Holdings (HIH) was recorded as the biggest corporate collapse in the history of Australia. Also an investigation of Royal Commission was warranted by the HIH collapse. Two questions considered in the failures of HIH Insurance: Did the auditors implement their responsibilities and roles? Did the auditors fulfil their auditing work ethically? This report provides an analysis of auditing issues arising from the collapse of HIH Insurance. Among factors that have gave rise to the corporate failure of HIH Insurance, that of the ethics of auditing profession, roles of auditors and effectiveness of audit committee have regarded as particular significance.
Contents
1. Introduction
HIH Insurance was established when MW Payne Liability Agencies Pty Ltd was incorporated by Michael Payne and Ray Williams joining together to do business of insurance underwriter in Australia in 1968. Their operations were throughout the world, accompanied with businesses working in numerous countries such as the United Kingdom, New Zealand, Hong Kong, and the United States (Peursem, Zhou, Flood & Buttimore, 2007). There are many varieties of insurances in the markets of UK, the USA and Australia, involving compulsory insurance (for example, workers’ compensation and third party motor vehicle insurance) and non-compulsory insurance (for instance, home contents and travel insurance) (Kehl, 2001).
More than 250 subsidiary companies comprised of HIH Insurance